RTRS: Nikkei up 0.7 pct, buoyed by U.S. policy hopes
Japan's Nikkei stock average rose 0.7 percent on Thursday, with financial shares such as Sumitomo Mitsui Financial Group (8316.T) surging on hopes for a U.S. government's bank rescue plan.
The market is waiting for earnings from key exporters such as Sony Corp (6758.T) and Toshiba Corp (6502.T) after the close, but many players said that with poor results mainly factored in, investors are more interested in the economic stimulus plans being drawn up in United States and Europe.
"For earnings, everybody knows most of them will be losses, so as more and more companies announce, it seems as if most of the bad news is out now -- especially for exporters and electronics firms," said Hideyuki Ishiguro, a supervisor in the investment advisory department at Okasan Securities.
"Of course, earnings are likely to still have a little impact by keeping overall Nikkei gains capped, but now the policies of not only America but also Europe will become the main factor."
Hopes for the establishment of a 'bad bank' in the United States that would let U.S. financial institutions move toxic assets off their books were supporting sentiment.
Some market players said Japanese banks would benefit indirectly as the scheme could help them to secure dollars.
The benchmark Nikkei .N225 gained 57.98 points to 8,164.27, edging down from earlier highs on profit-taking after climbing nearly 6 percent this week. The broader Topix rose 0.8 percent to 810.54.
Sumitomo Mitsui Financial Group gained 13.4 percent after earlier soaring over 3,810 yen despite saying third-quarter net profit fell 99 percent, hit by a weak economy and losses on it stock portfolio. It stuck to its full-year forecast.
"It seems the stock jumped on short covering by funds. In theory, it was also a reaction after its earnings report as bad news seem to have been exhausted for now," said Kenichi Hirano, operating officer at Tachibana Securities.
The S&P financial index .GSPF jumped more than 10 percent on hopes for the U.S. government's rescue plan for banks.
Mitsubishi UFJ Financial Group (8306.T), Japan's largest bank, climbed 4.6 percent to 526 yen and No.2 Mizuho Financial Group (8411.T) gained 5.6 percent to 246 yen.
Exporters, which gained in early trade as the yen retreated against the dollar, trimmed gains slightly as the dollar softened, falling 0.1 percent to 90.11 yen. Canon Inc (7751.T), which on Wednesday reported an 81 percent fall in quarterly profit and predicted a further slide in annual profit to a 14-year low this year, was up 1.7 percent to 2,635 yen. Sony gained 3.2 percent and Toyota Motor Corp (7203.T) rose 1.7 percent, but both were off earlier highs.
